Fair Work Act 2009

s.394 - Unfair dismissal

Application for relief from unfair dismissal - genuine redundancy - evidence of financial performance and operational changes - evidence beyond mere assertions - job on East Coast made redundant because of operational changes - not reasonable to redeploy to a West Coast position held by another employee - compliance with consultation requirements - complete defence - not an unfair dismissal - application dismissed.

• [1] On 4 April 2025 Mr Mark Duffy applied to the Fair Work Commission under s.394 of the Fair Work Act 2009 (Cth) for an unfair dismissal remedy, alleging he was unfairly dismissed from his employment with Enermech Pty Limited. Enermech argued that Mr Duffy's earnings were above the high-income threshold and also that the dismissal was a case of genuine redundancy.

• [2] On 17 June 2025 Commissioner Simpson dismissed Enermech's contention that Mr Duffy's earnings were above the high-income threshold: Duffy v Enermech Pty Limited [2025] FWC 1670. The Commissioner accepted that Mr Duffy was not covered by a Modern Award or Enterprise Agreement (at [15]), and that his earnings did not exceed the high-income threshold if his retention payment was excluded from the calculation of his earnings (at [19]).

• [3] This decision deals with Enermech's contention that the dismissal was a case of genuine redundancy.

• [4] If the dismissal was a case of genuine redundancy then the dismissal cannot be an unfair dismissal under s.385 of the Fair Work Act 2009 (Cth) (the Act):

A person has been unfairly dismissed if the FWC is satisfied that:

(b) the dismissal was harsh, unjust or unreasonable; and

(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and

(d) the dismissal was not a case of genuine redundancy.

Note: For the definition of consistent with the Small Business Fair Dismissal Code: see section 388."

(1) A person's dismissal was a case of genuine redundancy if:

(a) the person's employer no longer required the person's job to be performed by anyone because of changes in the operational requirements of the employer's enterprise; and

(b) the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy.

(2) A person's dismissal was not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within:

(b) the enterprise of an associated entity of the employer."

• [5] The explanatory memorandum to the Act includes the following informative summary:

1546. This clause sets out what will and will not constitute a genuine redundancy. If a dismissal is a genuine redundancy it will not be an unfair dismissal.

1547. Paragraph 389(1)(a) provides that a person's dismissal will be a case of genuine redundancy if his or her job was no longer required to be performed by anyone because of changes in the operational requirements of the employer's enterprise. Enterprise is defined in clause 12 to mean a business, activity, project or undertaking.

1548. The following are possible examples of a change in the operational requirements of an enterprise:

• a machine is now available to do the job performed by the employee;
• the employer's business is experiencing a downturn and therefore the employer only needs three people to do a particular task or duty instead of five; or
• the employer is restructuring their business to improve efficiency and the tasks done by a particular employee are distributed between several other employees and therefore the person's job no longer exists.

1549. It is intended that a dismissal will be a case of genuine redundancy even if the changes in the employer's operational requirements relate only to a part of the employer's enterprise, as this will still constitute a change to the employer's enterprise.

1550. Paragraph 389(1)(b) provides that it will not be case of genuine redundancy if an employer does not comply with any relevant obligation in a modern award or enterprise agreement to consult about the redundancy. This does not impose an absolute obligation on an employer to consult about the redundancy but requires the employer to fulfil obligations under an award or agreement if the dismissal is to be considered a genuine redundancy.

1551. Subclause 389(2) provides that a dismissal is not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within the employer's enterprise, or within the enterprise of an associated entity of the employer (as defined in clause 12).

1552. There may be many reasons why it would not be reasonable for a person to be redeployed. For instance, the employer could be a small business employer where there is no opportunity for redeployment or there may be no positions available for which the employee has suitable qualifications or experience.

1553. Whether a dismissal is a genuine redundancy does not go to the process for selecting individual employees for redundancy. However, if the reason a person is selected for redundancy is one of the prohibited reasons covered by the general protections in Part 3-1 then the person will be able to bring an action under that Part in relation to the dismissal."

• [6] The Commission is required to determine whether the dismissal was a case of genuine redundancy before determining the merits of the application (per s.396). Genuine redundancy is a complete defence to an unfair dismissal application (per _Ulan Coal Mines Limited v Honeysett and other_s [2010] FWAFB 7578 at [26], [2010] FWAFB 7578; (2010) 199 IR 363 at 370).

• [7] For a dismissal to be a genuine redundancy the Commission must be positively satisfied that the following three conditions were met:

(a) the employee's "job" was made redundant because of changes to the employer's operational requirements (s.389(1)(a)); and

(b) the employer complied with any applicable consultation obligations under a modern award or agreement (s.389(1)(b)); and

(c) it would not have been reasonable to redeploy the employee in another role in the employer's enterprise (s.389(2)).

• [8] The Commission must make findings about all three matters. In Hallam v Sodexo Remote Sites Australia Pty Ltd [2018] FWCFB 1496 at [10]- [12] the Full Bench found that a failure to make a finding about consultation obligations was a jurisdictional error.

• [9] There must be an appropriate evidentiary basis for these requisite findings. The employer bears the burden to provide this evidentiary basis because the employer carries the risk of failure if any of the conditions are not satisfied (per Teterin v Resource Pacific Pty Ltd [2014] FWCFB 4125 at [25]- [29], [2014] FWCFB 4125; (2014) 244 IR 252 at 262-263).

• [10] Ordinarily the relevant facts are particularly within the knowledge of the employer respondent rather than the dismissed applicant. The employer must provide evidence to the Commission to support their defence, including evidence of the changed operational requirements. The evidence must be more than mere assertions of a desire to do things differently (see Roy Morgan Research Ltd v K Baker [2013] FWCFB 8936 at [27]).

• [11] However there are practical limits on the evidence employers will need to provide. The genuine redundancy defence is clearly designed to make it easier for employers to defend unfair dismissal claims if the criteria in s.389 is satisfied. In performing its functions in a manner that is quick, informal and avoids unnecessary technicalities (per s.577) it would defeat the intention of the genuine redundancy exclusion to require employers to provide exhaustive evidence of its changed operational requirements (see Kieselbach and Amity Group Pty Ltd, PR973864 at [34]-[36]).

• [12] In considering whether an applicant's "job" has been made redundant the Commission applies the following established principles (see Ulan Coal Mines Limited v Henry Jon Howarth and others [2010] FWAFB 3488 at [15]- [17], [2010] FWAFB 3488; (2010) 196 IR 32 at 36-37 ("Ulan v Howarth") citing Jones v Department of Energy and Minerals [1995] IRCA 292; (1995) 60 IR 304 at 308):

(a) the expression "the person's employer no longer required the person's job to be performed by anyone" in s 389(1)(a) has long been used as a practical definition of redundancy;

(b) a job involves "a collection of functions, duties and responsibilities entrusted, as part of the scheme of the employees' organisation, to a particular employee";

(c) it is critical to determine whether the employee has any duties left to discharge after the re-organisation. If there is no longer any function or duty to be performed by the employee, their "job" is redundant;

(d) however the test is not whether the functions or duties continue, but whether the "job" itself survives. The "job" of the employee might not exist even if the duties continue to be performed by other employees.

• [13] The Full Bench in Mackay Taxi Holdings Ltd v Wilson [2014] FWCFB 1043, (2014) 240 IR 409 ("Mackay Taxi") made some helpful observations about the phrase "changes in the operational requirements of the employer's enterprise". The Full Bench found that the employer's changes to the employee's position were "operational changes" because they were "changes that give effect to a change in the operational focus of a position to the benefit or advantage of the employer (be it to meet governance requirements or to improve efficiency)" (at [36]). The Full Bench gave other examples of the kinds of changes that would be operational changes at [41]:

"Further, the examples provided by the Explanatory Memorandum, referred to above, are not exhaustive, but they are demonstrative of the kinds of changes in operational circumstances that can affect enterprises. Such changes may, as here, alter or extend the range of duties that comprise a job and the qualification mix required as a consequence. Equally, the duties that comprise a job may be redistributed and continue to be performed by others (and the job disappear). Or else the job itself and the body of duties associated with it may disappear altogether (with a downturn, an efficiency drive, a contractual change, a change in business focus, or a technological development etc)."

• [14] In Mackay Taxi the Full Bench found that the employer's operational objective "brought about a real and objective change to the position" at [43]:

"The operational objective on the part of the Appellant to rely on the qualified services of a bookkeeper to improve the "capacity of the administration to function at a higher level" brought about a real and genuine change to the position as it had been performed by the Respondent. This is the kind of change that ordinarily would give rise to a redundancy (where the incumbent does not possess the qualifications to give effect to the operational objective)."

• [15] Although most redundancies occur when employers face economic hardship, it is not necessary for the employer's operational changes to be caused by any kind of hardship. In Staniland v Stegbar Pty Ltd [2017] FWC 4703 Deputy President Saunders found that an employer's decision to make an employee's job redundant because it decided that it was better to have two full-time employees in a showroom in order to meet its strategic goals was a genuine redundancy (see also Kelly v AMWU [2023] FWC 2669 at [160]- [162]).

• [16] Similarly, s.389(1) does not require or even allow a merits review of the employer's decision to make a position redundant. As the Full Bench said in Adams v Blamey Community Group [2016] FWCFB 7202 at [14]:

"Insofar as Ms Adams' appeal challenged the findings made by the Senior Deputy President in relation to s.389(1)(a), it is necessary to state at the outset that consideration of whether the employer no longer required the person's job to be performed by anyone because of changes in the operational requirements of the enterprise does not involve a merits review of the employer's decision to make the person's job redundant. It is not to the point that it may have been open to the employer to make a different operational decision which may have allowed the relevant employee's job to be retained. As was stated in Low v Menzies Property Services Pty Ltd, "Whether it was objectively fair or justifiable to decide to abolish a position is beside the point, as long as the employer acted as it did because of changes in its operational requirements." What s.389(1)(a) requires is for findings of fact to be made as to whether, firstly, the employer has made the decision that the relevant employee's job is no longer required to be performed by anyone and, secondly, whether that decision was made because of changes in the operational requirements of the enterprise. If there was an ulterior motive for the decision - that is, if the real reason for the decision did not genuinely relate to any change in operational requirements, whatever the ostensible reason may have been - then it will not be possible to make the second finding of fact. However once these findings of fact are made, the element of the genuine redundancy definition contained in s.389(1)(a) is satisfied and no further inquiry is necessary."

• [17] Finally, as the plurality of the High Court in Helensburg Coal v Bartley [2025] HCA 29 at [31] ("Helensburg Coal") observed, the employer's decision to no longer require the work to be performed by anyone does not need to be a reasonable decision:

"The second part of s 389(1)(a) provides that the job must have ceased to be needed "because of changes in the operational requirements of the employer's enterprise". An employer determines what those changes might be or if they are needed. There is no reasonableness inquiry in s 389(1). Therefore, the fact that the employer, due to changes in operational requirements, no longer required the work to be performed by anyone need not have been reasonable."

• [18] Section 389(1)(b) of the Act provides that for there to be a genuine redundancy the employer must have complied with any obligation in a modern award or enterprise agreement to consult about the redundancy. If there is an explicit requirement to consult then the Commission's inquiry is only directed to that specific obligation (see Ulan v Howarth at [27]).

• [19] Section 389(2) is qualified by a requirement of reasonableness. The range of the inquiry permitted by s 389(2) is limited in the sense that the inquiry is in respect of the employer's (or an associated entity's) "enterprise" and that the redeployment of the person must have been reasonable "in all the circumstances" (see Helensburg Coal at [34]). The plurality found:

(a) s.389(2) is qualified by a requirement of reasonableness (at [33]);

(b) the range of the inquiry permitted by s 389(2) is limited in the sense that the inquiry is in respect of the employer's (or an associated entity's) "enterprise" and that the redeployment of the person must have been reasonable "in all the circumstances" (at [34]);

(c) the employer's enterprise is its business, activity, project or undertaking (at [35] per s.12);

(d) the Commission cannot disregard the nature of the employer's enterprise (at [35]);

(e) the nature of the employer's "enterprise" is not defined by reference to how the employer uses its workforce to operate its enterprise, or why it does so in that manner (at [35]) however considering "all the circumstances" might involve the attributes of the employer's enterprise that concern its workforce (at [40]);

(f) the text of s.389(2) does not assume that a job must be readily available, nor does the notion of redeployment within the enterprise require there to be a vacant position (at [36]);

(g) the reasonableness of redeployment is to be assessed by reference to the circumstances at the time of the dismissal (at [37]), and in the context of the employer's enterprise (at [38]); and

(h) the term "all of the circumstances" is very broad and can include " the attributes of the otherwise redundant employee, such as their skill set, experience, training and competencies, ... those attributes of the employer's enterprise that concern its workforce, such as: its policies, including appetite for risk; plans; processes; procedures; business choices, such as a decision to terminate a contract in the future and a decision to persist with using contractors; decisions regarding the nature of its workforce, such as whether it has a blended workforce of both employees and contractors; contract terms, such as whether they are "as needs" contracts and whether the contractors are on daily work orders or on some long-term fixed commitment; practical concerns, such as whether redeployment would require the employee to undergo further training; and anticipated changes, such as another employee going on parental leave or retiring, a contract expiring, or a position being performed by a contractor while waiting for an employee to be hired" (at [40]).

• [20] Mr Duffy gave evidence at the hearing, as did Mr Heath Ward and Mr Daniel Halse. Mr Ward is Enermech's General Manager, Operations and Mr Halse is the Operations Manager, Process and Pipeline.

• [21] Mr Duffy said that in his role he was responsible for:

(a) end-to-end project management of scopes for major clients including Anglo American and Inpex;

(b) budgeting and forecasting for multimillion-dollar scopes;

(c) staff management including project managers, engineers, coordinators, supervisors, and technicians;

(d) tendering support and client engagement; and

(e) national alignment with cross-divisional teams.

• [22] Enermech tendered in evidence a job description for the "Project Manager - PIPS/Nitrogen Services" position that included the following:

• Direct control of operational activities to ensure effective project completion in accordance with the EnerMech Project Management framework and procedures
• Provide a primary client focal point for all aspects of the project execution
• Provide leadership and direction for field personnel via a detailed technical understanding of the business line including ensuring the selection and management, training, and development of field staff is of the highest calibre
• Lead the project management including providing onsite leadership to ensure the team understands the services that need to be delivered and the expectations of performance
• Provide support to the business development team in the pursuit of key projects and clients.
• Responsible for the safe and productive running of projects and mobilizations including equipment and personnel.
• Involved in the commercial process, ensuring projects are profitable and invoicing is performed correctly and in a timely manner.
• Ensure all scheduled and unscheduled maintenance programs and practices are followed to ensure maximum uptime for all EnerMech equipment.
• Providing technical support in the CAPEX process will also be a key aspect of this role."

• [23] Mr Duffy said that he had never seen this job description and he submitted that "it appears to have been generated solely for the purpose of this matter." Enermech did not lead any evidence that established that the job description had ever been provided to Mr Duffy.

• [24] Mr Duffy used the position title "Process Services Manager" within the organisation. This title was used in Mr Duffy's email footer, including in emails that were sent to Enermech's local HR manager. Mr Halse gave evidence that he thought that Mr Duffy gave himself the title and did not think the title was properly authorised. Mr Duffy said he obtained permission from HR to use the title. Shortly before the dismissal Mr Duffy asked for his written contract of employment to be amended to include this title in order to improve his application for a permanent residency visa. Enermech did not grant the request because it was already contemplating organisational changes.

• [25] For present purposes it is sufficient to understand that Mr Duffy's job or position focused on work on projects undertaken by Enermech.

• [26] Enermech's evidence was that it's two most recent projects on the East Coast, being Esso and Anglo-American, had wound up by November 2024. Enermech's evidence also revealed heavy losses across the East Coast operations from October 2024 onwards. Enermech provided evidence of sales and gross profit figures from January 2024 to June 2025.

• [27] From November 2024 onwards Mr Duffy worked from Brisbane on a project for Inpex. Some of Enermech's employees were 'embedded' in Inpex's offices in Perth, even though Inpex's facility is in the Northern Territory.

• [28] In February 2025 Enermech completed a review of its national operations and as a result of the underperformance of its operations and lack of ongoing and/or forecasted projects scheduled across the East Coast operations. Following this review a structural change of Enermech's operations was required to ensure long term viability. Mr Ward's evidence was:

"Based on evaluation of these factors, it was determined that:

(a) there was insufficient operational activity to justify maintaining the existing number of personnel employed within the business at that time; and

(b) due to a sustained decline in business activity, coupled with a lack of confirmed or prospective client work, it became evident that certain roles within the Respondent's East Coast operations were no longer financially sustainable and could not be supported by revenue generated from client fees.

The Respondent explored whether it had capacity to absorb the cost of the identified roles in the hope that business conditions would improve.

However, following heavy losses across the business in January and February 2025, and with no indication that conditions would improve within the Respondent's Queensland operations in the near future, it was apparent that the Respondent needed to reduce its operating costs to become commercially sustainable."

• [29] Enermech decided to make four positions redundant: one supervisor position, two project manager positions including Mr Duffy's position, and one planner position. Enermech submitted:

"The duties associated with the Project Manager position were project-specific in nature. As such, in the absence of ongoing or upcoming projects requiring delivery, [Mr Duffy's Position] and its associated responsibilities ceased to be necessary. To the extent that any duties being performed by the Applicant at the time of termination, such as tasks relating to the Ichthys projects, remained operationally required, those functions were reallocated to other project management personnel within the Respondent's Western Australia team, who had capacity to take on the project work within their current workload."

• [30] I am satisfied that Enermech decided that it no longer required Mr Duffy's job to be done by anybody.

Was Mr Duffy's job redundant because of operational changes?

• [31] Mr Duffy argued that Enermech's East Coast operation was more successful than Enermech claimed. He referred to a report issued by Enermech's previous General Manager that suggested that the East Coast performance was better than the West Coast performance. Enermech said it could not locate the report cited by Mr Duffy.

• [32] Mr Duffy also relied on a $600,000 settlement between Enermech and Anglo American regarding disputed invoices. Mr Duffy said this settlement should have significantly improved the profitability of East Coast operations.

• [33] Enermech produced documents in answer to an order for production. Mr Duffy argued that the documents produced by Enermech "lacked meaningful breakdowns typically expected of internal financial performance reports" which limited assessment of Enermech's claims. Mr Duffy also submitted that the documents supplied by Enermech did not identify or address overhead costs and said "any assessment of profitability or redundancy must consider fixed and variable costs and how roles like mine contributed to recovery of those costs via billable scopes."

• [34] In this case the two key matters to consider in determining whether Mr Duffy's job was redundant are (1) whether Enermech had decided that it no longer wanted Mr Duffy's job to be done by anybody and (2) whether Enermech's decision was because of changes in the requirements of Enermech's operational enterprise.

• [35] There was no real contest that Mr Duffy's position as a project manager on the East Coast was made redundant. Mr Duffy's position was one of four positions made redundant at the same time.

• [36] Mr Duffy's challenge was largely directed to the reason why his position was redundant, rather than the fact that it was redundant.

• [37] Mr Duffy admitted that the financial basis for his redundancy "is unsubstantiated". Mr Duffy did not submit that Enermech's evidence and argument are false or submit that his position was made redundant for some ulterior or undisclosed reason. Rather, Mr Duffy's argument seems to be that there were not good enough, or strong enough, financial reasons to make his position redundant.

• [38] The Commission's task is not to conduct a merits review of Enermech's decision to make Mr Duffy's position redundant. For the purposes of s.389 it does not matter whether the changes to Enermech's operational requirements were optimal, or even commercially necessary (see [13]-[17] above). Enermech decided to reduce its workforce on the East Coast, and they had concerns about the performance of the East Coast operation more generally. Enermech provided evidence that was beyond mere assertions, including financial figures that are the subject of a non-publication order.

• [39] Mr Duffy had the opportunity to test Enermech's evidence and did so. Essentially Mr Duffy's criticism of Enermech's evidence was that it was not sufficiently comprehensive and that the evidence did not make a strong enough case to justify the redundancy - which is not the test.

• [40] Enermech's evidence was plausible and satisfactory in establishing that Mr Duffy's position was made redundant to give effect to a change in the operational focus of his position to the benefit or advantage of the employer (per Mackay Taxi)

• [41] Enermech did not have any projects on the East Coast at the time of the dismissal and no further projects were forecast. East Coast operations had experienced losses from October 2024. Mr Ward and others formed the view that certain roles within Enermech's East Coast operations were no longer financially sustainable and could not be supported by revenue generated from client fees.

• [42] Enermech's objective to reduce costs on the East Coast brought about a real and genuine change to Mr Duffy's position. I am satisfied that Mr Duffy's position was made redundant because of changes to Enermech's operational requirements.

• [43] Mr Duffy's employment was not covered by an Award or Agreement and there was therefore no obligation under an instrument to consult with Mr Duffy about his redundancy. The condition in s.389(1)(b) are satisfied.

Would it have been reasonable to redeploy Mr Duffy?

• [44] Enermech led evidence of four available positions across its enterprise. Mr Duffy did not argue that it would have been reasonable to redeploy him to any of those positions. There was also evidence that Enermech considered other positions.

• [45] Mr Duffy argued that Enermech should have deployed him to a position on the West Coast as a project manager. At the time of his dismissal there were project managers employed on the West Coast however there were no vacant positions. Mr Duffy asserted that the Project Manager(s) on the West Coast were less experienced than he was and therefore Enermech should have made one of those employees redundant and redeployed Mr Duffy to the West Coast.

• [46] As Justice Steward observed in obiter in Helensburg Coal at [136]:

"... it must be accepted that it would be difficult to conclude that redeployment is reasonable if that meant that another person with a job, for which there is a business need, has to make way for someone else whose job was no longer needed. It would make very little sense in the ordinary case to conclude that it was reasonable to redeploy a person by terminating the permanent employment of another person..."

• [47] Mr Duffy's argument challenges the process for selecting individual employees for redundancy - in his case challenging the process for selecting which project manager to make redundant. The complete defence in s.389 is intended to eliminate this argument in unfair dismissal claims. It is well established in case law and in the terms of s.389 that the Commission is not to conduct an inquiry into whether it was reasonable, or for that matter fair, to choose one employee for redundancy over another. As the Full Bench in UES (Int'l) Pty Ltd v Harvey [2012] FWAFB 5241 at [27]- [30], [2012] FWAFB 5241; (2012) 215 IR 263 at 275 found:

"The terms of s 389 of the FW Act suggest the process for selecting individual employees for redundancy is not relevant to whether a dismissal was a case of genuine redundancy. The relevant Explanatory Memorandum confirms as much...

We think it unlikely that it was intended that FWA's consideration of whether there was a valid reason for the dismissal related to the person's capacity or conduct would extend to the process for selecting the person for redundancy when:

(i) the process for selecting a person for redundancy is not relevant to FWA's determination of an unfair dismissal remedy application if the s 389 criteria for a case of genuine redundancy are met, and

(ii) any unmet criteria in s 389 of the FW Act can be taken into account as part of s 387(h) in FWA's consideration as to whether the dismissal was harsh, unjust or unreasonable.

To conclude otherwise would mean that where an employer met the s 389 criteria for a genuine redundancy the process for selecting the person for redundancy would not be a matter FWA would consider in respect of an unfair dismissal remedy application. However (unless the application was otherwise determined) an employer who did not meet the s 389 criteria because, for example, they failed to consult as required by s 389(b) of the FW Act would have both the failure to consult and the process for selecting the person for redundancy considered in any unfair dismissal remedy application.

We recognise that statutory provisions concerning a valid reason for termination of employment connected with or related to an employee's capacity or conduct and the issue of the selection process for redundancy were considered by the Full Federal Court in Kenefick v Australian Submarine Corp Pty Ltd (No 2) .... However, the legislative context in which each of those decisions was made was very different to that in the FW Act."

(a) Mr Duffy's job was made redundant because of changes to Enermech's operational requirements (s.389(1)(a)); and

(b) Enermech was not required to comply with any specific consultation obligations under a modern award or agreement (s.389(1)(b));

(c) it would not have been reasonable to redeploy Mr Duffy in another role in the Enermech's enterprise (s.389(2));

(d) the dismissal of Mr Duffy was a case of genuine redundancy for the purposes of s.389; and therefore

(e) Mr Duffy was not unfairly dismissed for the purposes of s.385 because his dismissal was a case of genuine redundancy.

• [49] I will make a separate order dismissing Mr Duffy's application (PR791435).

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